Here’s how to stack Tilray, sundial and other pot stocks

While marijuana stocks have often traded in tandem when driven by sentiment, many of these stocks have had varying degrees of success. Some investors are looking for funds traded on the stock exchange to bet on a wider basket of shares they can.

ETFMG Alternative Harvest ETF

(MJ), which has exposure to marijuana companies, fell 24% on Thursday, back close to earlier-week levels. But that ETF does not include US multi-state operators or MSOs, which have to list over the counter in the US because they sell a product where it is illegal at the federal level.

Advisorshares ETF Pure Cannabis

(YOLO) includes the US MSO.

Here are some of the biggest individual actions and what analysts predict. It is not an exhaustive list, as there are more than a hundred public actions with some links to the cannabis business.

Tilray (TLRY) and Aphria (APHA)

Tilray

and Aphria announced a merger in December. Aphria CEO Irwin Simon anticipates the deal being reached in the first half of this year. An investor would receive approximately 0.84 shares of Tilray combined for each share of Aphria they held. Aphria has a recent market capitalization of $ 8.3 billion, compared to Tilray at $ 10.1 billion.

Tilray entered the year with a high short interest rate, at about 48% of the shares available for trading, according to data from S3 Partners. This has been reduced to a recent 23%. Aphria’s short interest rate is about 7.4% of the shares available for trading, down from 16% at the beginning of the year. When investors sell a short stock, they sell a borrowed stock in the hope that they will be able to return it by buying the shares at a lower price. When a lot of short sellers rush to cover and prevent further losses, stocks can increase.

For Aphria, analysts expect the company to end fiscal year 2021 in May, with year-round sales of $ 534.8 million. Sales are expected to grow to $ 710.3 million in fiscal year 2022. On the other hand, Tilray ended its last fiscal year in December. Analysts expect the company to report year-over-year sales of $ 208 million, up from $ 277.8 million this year. Of course, the merger will blur any estimates.

The average analyst valuation for Tilray is Hold, according to FactSet, although the average target price is only $ 12.20. The average rating for Aphria is overweight, but the average target price is $ 12.60.

Sundial Growers (SNDL)

The wristwatch, which once traded over $ 11, has reached penny stock. In February last year, the core management team resigned. The company had problems that included half a ton of cannabis rejected by a customer due to poor quality, MarketWatch reported. Earlier this month, Sundial announced a capital increase that lowered shares.

The share returned this month against the background of retailers’ interest, increased by 403% compared to last year. Its market value is $ 4.3 billion after Thursday’s withdrawal. Analysts expect sales to reach $ 53.1 million for the full year 2020. Consensus estimates require $ 62.6 million in 2021.

Aurora Cannabis (ACB)

Aurora Cannabis

was previously one of the largest holdings on Robinhood. But the company, for several quarters, has struggled to make positive adjusted earnings before interest, taxes, depreciation and amortization. A new chief executive and a few major cost cuts helped, but did not win over analysts. None of the 17 analysts listed by FactSet have a buy rating, while four analysts recently rated a sale. The average target price of USD 9.07 is below recent levels.

The company has a market capitalization of $ 3.7 billion. Analysts do not forecast a profitable fiscal year in the next few years. The consensus estimate calls for a net loss of $ 1.16 per share for the fiscal year ending June, according to FactSet. In terms of sales, analysts predict that the company will reach $ 227.4 million in fiscal year 2021, which ends in June. Forecasts will increase to $ 303.3 million in fiscal year 2022.

Raising Canopy (CGC)

Canopy growth

has a recent market capitalization of $ 19.7 billion. Brewer

Constellation marks

(STZ) has a controlling stake in Canopy. The manufacturer also has an agreement with Acreage Holdings that would allow it to enter the US cannabis market, but the merger itself is triggered by regulatory changes that would allow it to do so.

The company has a market value of approximately $ 19.7 billion. Analysts expect sales of $ 441.4 million for fiscal year 2021, which ends in March. They forecast an increase to $ 639.9 million in fiscal year 2022.

Cronos Group (CRON)

Cronos Group

was one of the few profitable Canadian cannabis companies in 2019, and investors expect it to continue in 2020, with estimates requiring earnings of 3 cents per share. But consensus estimates expect a net loss of 24 cents per share in fiscal year 2021.

The company received $ 1.8 billion from the tobacco giant

Altria Group

(MO) in 2018 for a 45% stake. Unlike its competitors, the company was conservative with its war chest. At the end of September, it still had $ 1.3 billion in cash and short-term investments. On the other hand, analysts estimate that sales will reach only $ 43.8 million in 2020 and are expected to grow to $ 86.9 million in 2021.

American multi-state operators

Although the recent rush to pot stocks has been spurred by a shift in political winds in US growers selling marijuana, they have in fact stayed with their Canadian counterparts in recent months. Cantor Fitzgerald analyst Pablo Zuanic said Barron’s he believes that “the first MSOs in the US are attractively valued with a long-term perspective, even if they get some of the Canadian demotion.”

US big names include

Curaleaf Holdings

(CURLF),

Green Thumb Industries

(GTBIF),

Cresco Labs

(CRLBF) and

Trulieve Cannabis

(TCNNF). Zuanic has an overweight rating on those stocks, while it has a neutral rating on most big Canadian names. It projects sales on the U.S. cannabis market of $ 22.1 billion in 2021, $ 28 billion in 2022 and $ 49 billion by 2025.

Write to Connor Smith at [email protected]